(Washington Post) President Obama’s rejection of the Keystone XL pipeline from Canada to the Gulf of Mexico is an act of national insanity. It isn’t often that a president makes a decision that has no redeeming virtues and — beyond the symbolism — won’t even advance the goals of the groups that demanded it. All it tells us is that Obama is so obsessed with his reelection that, through some sort of political calculus, he believes that placating his environmental supporters will improve his chances.

Aside from the political and public relations victory, environmentalists won’t get much. Stopping the pipeline won’t halt the development of tar sands, to which the Canadian government is committed; therefore, there will be little effect on global-warming emissions. Indeed, Obama’s decision might add to them. If Canada builds a pipeline from Alberta to the Pacific for export to Asia, moving all that oil across the ocean by tanker will create extra emissions. There will also be the risk of added spills.

Now consider how Obama’s decision hurts the United States. For starters, it insults and antagonizes a strong ally; getting future Canadian cooperation on other issues will be harder. Next, it threatens a large source of relatively secure oil that, combined with new discoveries in the United States, could reduce (though not eliminate) our dependence on insecure foreign oil.

Finally, Obama’s decision forgoes all the project’s jobs. There’s some dispute over the magnitude. Project sponsor TransCanada claims 20,000, split between construction (13,000) and manufacturing (7,000) of everything from pumps to control equipment. Apparently, this refers to “job years,” meaning one job for one year. If so, the actual number of jobs would be about half that spread over two years. Whatever the figure, it’s in the thousands and thus important in a country hungering for work. And Keystone XL is precisely the sort of infrastructure project that Obama claims to favor.

The big winners are the Chinese. They must be celebrating their good fortune and wondering how the crazy Americans could repudiate such a huge supply of nearby energy. There’s no guarantee that tar-sands oil will go to China; pipelines to the Pacific would have to be built. But it creates the possibility when the oil’s natural market is the United States...

But it is not only crude. Wonder why no jobs are being created? Wonder why despite record low mortgage rates there is no bottom in sight for housing? Simple - nobody can plan one month, let alone one year ahead for any US-based venture or business. The political risk is simply too great - whether it is contract law (see GM and Chrysler) or simple solvency (see record high levels of cash hoarded by companies), it is there, and as long as it is there, there will be no hiring, no capex spending, no growth, and no real improvement in the economy, the real economy, not that defined by where the Russell 2000 closes on any given day.

On a related note, as our nation languishes, guess who's taking advantage of drilling in the Gulf of Mexico? If you guessed communist Cuba, you guessed right. It gets worse, though. Not only are the red-communist Cubans now drilling just miles (60-70) off of Key West, Florida, they are doing so from a Chinese-manufactured oil rig under the guidance of Repson, a Spanish oil firm. Plus, we are barred from buying the oil from the Cubans which are estimated to be sitting on several billion barrels of reserves (they say 20 billion, the U.S. government says it's closer to 5 billion).

Truly the only way to stop madness like this is to drastically scale back the power -- money -- of the Federal Leviathan. Starving the beast is the only way we will finally heal this nation and get us off this national suicide trajectory. And that doesn't mean slashing taxes while not cutting spending, Republicans.

Which presidential candidate today has the gravitas and track record to usher in such a scaling back?

1 comment:

"Plus, we are barred from buying the oil from the Cubanswhich are estimated to be sitting on several billion gallons of reserves (they say 20 billion, the U.S. government says it's closer to 5billion)."

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